Does anyone like natural gas?

Question

What is your opinion on nat gas?  It seemed like nat gas was the way to go when oil was sitting near $150/barrel.  Specifically looking at Sandridge Energy (SD).  It has fallen over 50% since early July.  Not sure what is going on; I know alot of the nat gas companies are getting beat up right now.  But these guys have taken a pounding.  Have any of you guys looked at SD?  Looking to get on board in the low 30s.  Any input would be greatly appreciated.

ogmike · Answer

What is your opinion on nat gas?  It seemed like nat gas was the way to go when oil was sitting near $150/barrel.  Specifically looking at Sandridge Energy (SD).  It has fallen over 50% since early July.  Not sure what is going on; I know alot of the nat gas companies are getting beat up right now.  But these guys have taken a pounding.  Have any of you guys looked at SD?  Looking to get on board in the low 30s.  Any input would be greatly appreciated.

jaxwhitey · Answer

I might get back in when I see some signs of life out of the sector.I jumped into and out of CHK several times the last few months, but am in no hurry to get back into the space.

claycourtlesson · Answer

NG is a very strong long-term investment when you figure the US is sitting on a lot of it.&#xD;&#xA; &#xD;&#xA;Only a matter of time before the US starts seriously cultivating its uses in transportation.  And then, its price could take off, unless, of course, the gov&#x27;t keeps lids on its price and just taxes the living crap out of it.

mikey22222 · Answer

Nah

whereismyhat · Answer

CHK is working like crazy right now in Arkansas....we have a lake house about an hour away from little rock and they are exploring around that lake like crazy for the past 2 1/2 years.  All the old hillbillies are hoping they find a spot on their land.  We are finally seeing some rigs put up this year.&#xD;&#xA; &#xD;&#xA;But man it has changed the view of the drive seeing those big rigs out of no where, just strange looking compared to the scenic drive we had on the way up there before.  (wow that was a long sentence!)

Gridophiles · Answer

CHK seems like a popular trade here.  I&#x27;ve been watching CHK the past couple weeks, and am glad I didn&#x27;t pull the trigger, cause I would have gotton thumped.....once again this year.&#xD;&#xA; &#xD;&#xA;That said, I don&#x27;t entirely believe this recent drop in commodities will continue, and I&#x27;m guessing things will be leveling off here.  Personally I&#x27;d keep CHK/NG on your watch list, and look for signs of strength, before making that trade.  If your looking long term, NG would be a very good investment.  Just my thoughts.

ogmike · Answer

Thanks for the input guys.  Yeah, CHK seems like a solid play.  Do any guys know much about SD?  Smaller oil and gas company out of OKC also.

ogmike · Answer

Ok, dropping it out there one more time.  Sandridge Energy is the company I&#x27;m looking at.  I want to get into natural gas, and I know Chesapeake or Devon would be safer bets.  But, I kind of want to take a gamble, and SD is getting near its 52 week low.  This company has seen some awesome growth over the past few years, and I think it will continue well into the future.  What can you guys tell me about Sandridge?  Should I pull the trigger?  Thanks.

jaxwhitey · Answer

I would not touch this stuff until you see it sustain a turnaround for a few days.

Nat gas prices are heading towards their 52 week lows and companies are still producing more than the system can absorb, that does not help. I realize most of these companies have hedged their sale prices at higher levels(CHK is about $9/bcf I think) but I still wouldn't touch them until you see a meaningful move to the upside. There is absolutely no reason to try to catch a bottom in these things. Most of these companies were stuck at levels well below this for years on end and only in the last 12 months have they made a move higher. They may move higher soon or they may drop all the way back down to their previous levels. Wait and see, you might miss out on a couple of points but thats a hell of a lot better than getting in and being under water almost immediately.

jaxwhitey · Answer

Another bad number for nat gas inventories this morning. These companies have really ramped up production and the supply is far exceeding the demand right now. If you are going to go long, hope for a long, cold winter

ogmike · Answer

Jax:  I appreciate your input.  Thought about it and will probably sit tight for now.  I&#x27;m still looking for that botton, and it seems to continue to fall.  I just feel like nat gas demand will be increasing alot in the near future, especially with this push for nat gas as a transportation fuel.  Also not quite sure how it will be affected by the election.  If we decided to drill in ANWR, I guess that plan goes down the drain, at least for the near future.  Thanks again for replying.

Does anyone like natural gas?

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